2 Ways Managers Can Conduct Better Performance Reviews

We understand that praise has its benefits in motivating people. However, when done badly they can become a stress or for the people who receive it, choking them up on current tasks and also affecting them down the line. A lot of the time, what many consider praise is really more of a comparison, stacking people against each other.

Using words like better or best, our praise focuses on how people compare instead of how an individual actually does. This comparison praise not only limits the people receiving it but also demotivates those who are being compared.

This demotivating practice of comparative praise is commonly seen in the workplace with numerical performance reviews. In a study by NeuroLeadership Institute found that when performance reviews were eliminated, managers actually gave more constructive feedback. In fact, according to a survey by the Corporate Executive Board (CEB) conducted on Fortune 1,000 companies, 66% of the employees were strongly dissatisfied with the performance evaluations they received in their organisations. Even more worryingly, 65% of the employees believed that performance evaluations were not even relevant to their jobs.

Why We Shouldn’t Kill Performance Evaluations Just Yet

With so many talks of how performance reviews can be damaging, some companies have started abolishing their use of performance evaluations in the workplace. In 2015, over 30 of the Fortune 500 companies stopped using performance reviews in the company. While stopping the use of performance reviews may seems like a viable solution, it perhaps raises an even greater problem for employees, “How then are we being measured?”.

Though performance evaluations has traditionally been viewed as a way for companies to measure the performance of their staff, and a faulty one at that, some may argue that the greater utility of such performance reviews is in allowing employees to gain a better understanding of how they’re doing at work.

In fact, studies would agree, as 87% of the people in a survey conducted by Facebook expressed that they would prefer to keep performance ratings. Instead of killing off performance reviews altogether, the majority of people are simply asking for companies to find a better way of doing it.

What does better look like? According to an article by the Harvard Business Review, a better system is one that is fair, transparent, and focused on developing the people. Similar to the core beliefs in the argument for pay transparency,by having a review system that is open allows the company to communicate the unique aspects of the company culture, putting presidence in the qualities that are important to the company. Transparency and openness in a performance review also allows employees to voice their opinions, and properly discuss their disagreements which makes it easier for people to accept the judgement even when they are not ideal.

For a performance review to be effective, a sense of fairness is crucial. It forms the foundation for proper discussion, and allows employees to evaluate and fend for themselves when necessary. As people we acknowledge that judgement is bound to take place, be it implicitly in one's mind or explicitly illustrated in a review. By having a fair and transparent platform it acts as a terms of agreement between the company and its people, empowering employees and giving them a greater sense of control in their career.

2 Easy Ways Managers Can Conduct Better Performance Reviews

With all that said, reality is even as a manager, you may not have the authority to change the type of performance review that is used in the company. However, what you do have is a say over the way in which you conduct it, and how you use it to encourage and motivate instead of discourage your team in the process.

1. Stop social comparing & praise based on individual merit

Looking back at the idea of praise, as we’ve mentioned, by default many people rely on comparison praise, specifically social comparisons where one person is compare with another. In a study, recently published by the Organizational Behavior and Human Decision Processes publication, looking at how social comparison performance evaluations compared with self comparison performance evaluations were perceived.

The study found that by in large, participants perceived evaluations to be significantly fairer when evaluations were based on self comparison. Therefore, for managers, a better approach to praise when reviewing one’s performance would be to be specific and praise on one’s merits and how they’ve progressed as an individual as opposed to how they fared against another.

2. Always deliver the bad news first

One of the biggest challenges with conducting a performance review is delivering mixed news. According to Dan Pink, a best selling author looking at people’s motivation, many studies have found that 80% of people when given the choice, prefer receiving bad news first and ending with a good news.

In fact, the beauty of delivering a good news following a bad news is because it elevates the experience for the listener. According to researchers Hal Hershfield and Laura Carstensen, examining what makes an ending meaningful for people, found that the most meaningful endings were defined by happy moments and was tinged with small components of sadness. Similar to how a pinch of salt is able to bring out a richer flavour in foods, small components of sadness in and otherwise happy account engages the listener in a less expected manner, creating a richer and more complex experience.